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New Delhi: In a significant development that could strengthen India’s export momentum, the United States has reduced reciprocal tariffs on Indian goods to 10 per cent from the earlier 25 per cent. The move follows a US Supreme Court ruling against President Donald Trump’s sweeping tariff regime, prompting the White House to impose a 10 per cent temporary global import surcharge for 150 days, starting February 24, 2026. This uniform levy replaces the earlier country-specific reciprocal tariff structure, substantially lowering the duty burden on Indian exporters.
Under the revised system, Indian products will now attract only a 10 per cent additional duty over the standard Most Favoured Nation (MFN) tariff. For example, a product with a base import duty of 5 per cent will now face a total duty of 15 per cent, compared to as much as 30 per cent earlier. This reduction significantly improves the price competitiveness of Indian goods in the American market and offers immediate relief to exporters across key sectors.
Trade Deal Talks Gain Momentum Amid Changing Tariff Landscape
The tariff relief comes at a crucial juncture, as India and the United States move toward finalising the first phase of their bilateral trade agreement. An Indian delegation is scheduled to meet US officials in Washington from February 23 to finalise the legal framework of the deal. Commerce and Industry Minister Piyush Goyal has indicated that the agreement could be signed next month and implemented by April.
Reciprocal tariffs were originally introduced in April 2025 to counter what the US described as an unfair tariff structure and to protect American industry. India was initially subjected to tariffs of up to 50 per cent, including penalties linked to its purchase of Russian crude oil. Although negotiations had earlier reduced this burden, the latest US decision to impose a uniform 10 per cent surcharge globally marks the most substantial relief yet.
However, some sector-specific tariffs remain in place. Indian steel, aluminium, and copper products will continue to face duties of up to 50 per cent. In comparison, certain auto components remain subject to 25 per cent tariffs, reflecting ongoing protection of sensitive US industries.
Strategic Reset in India-US Trade Ties, Opportunity for Fresh Negotiations
Trade experts believe the tariff cut could alter the dynamics of negotiations between the two countries. India had earlier agreed to reduce certain tariffs, based on the expectation that the US’s reciprocal tariffs would fall to 18 per cent. With duties now reduced to 10 per cent for all countries, experts suggest India may reassess its concessions to ensure balanced gains.
The development assumes greater importance given the scale of bilateral trade, which reached $186 billion in 2024-25. The United States is India’s largest export destination, accounting for nearly 18 per cent of total exports. India enjoys a trade surplus of over $44 billion with the US, driven by strong exports of pharmaceuticals, telecom equipment, garments, petroleum products, and engineering goods.
With tariff barriers easing and trade negotiations entering their final phase, the latest US decision is expected to strengthen export prospects, boost investor confidence, and pave the way for a more stable and mutually beneficial trade partnership between the two countries.
